Sustaining stability

Fallout of the Iran war must be sensibly managed

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It remains unclear when the Iran war will end. The biggest reason for this uncertainty is the lack of clarity over the war's objectives. Iran is raising the cost, not only for the United States (US) and its allies in the region but also for the rest of the world. The effective blockade of the Strait of Hormuz has created a shortage in oil & gas and pushed up prices. After touching nearly $120 per barrel last week, prices of Brent crude oil are hovering around $100. Since India imports over 85 per cent of the crude oil it consumes, and the bulk of the oil comes from West Asia, it is significantly exposed to the crisis. Sustained higher prices, leading to prolonged risk aversion in the global financial system, can also expose other vulnerabilities.